Headwaters now BearWaters after trademark tangle

Beer had been flowing from the taps of Headwaters Brewing Company in Waynesville for just a few months when the bad news arrived — a cease-and-desist letter from another brewery claiming rights to Headwaters’ name.

Victory Brewing Company out of Pennsylvania makes a beer called Headwaters Pale Ale, and while Headwaters Brewery had its name first, Victory Brewing beat them to the trademark punch.

Headwaters was faced with two options: limit their own distribution to North Carolina or change their name within six months to avoid a legal conflict.

Kevin Sandefur, one of Headwater’s three owners, didn’t relish the painstaking process of changing their name. There were billboards, T-shirts, pint glasses, hats — not to mention cardboard bar coasters — that will have to be redone, along with a new logo and new web address. But worse, the microbrewery had made a name for itself and its beer, and Sandefur would now have to redouble his marketing to introduce a new name into craft beer circles.

But, with plans for a brewery expansion this spring and hopes that the company will be distributing beyond state lines by year’s end, he bit the bullet.

“We decided to clean the slate and get a new name,” Sandefur said.

They hired a marketing consultant out of Knoxville, who came up with the idea of switching out just two letters in the name to keep it similar.

Starting this week, Headwaters becomes Bearwaters Brewing Company.

Luckily — and Sandefur could use a little luck at this point — Headwaters’ logo was copyright protected and also happened to be of a bear, so that gets to stay.

But what really hurts Sandefur is that his company had the name first. The name was inspired by the fact that every drop of water in Haywood County originates in Haywood, nothing flows in. It’s high elevation makes Haywood a factory of headwaters.

They came up with the name in 2009 and went public with the name in 2010 after entering and winning the Haywood County Chamber of Commerce business start-up competition.

Victory Brewing Company didn’t come out with its Headwaters Pale Ale name until January 2012, Sandefur said. But Victory beat him to the trademark. It can cost an upwards of $2,000 in fees to secure a trademark — a large expensive for a startup business but more manageable for a national distributor like Victory.

Sandefur admits he took a risk by not securing it, hoping one day the fledgling business would have more expendable money.

“I gambled,” Sandefur said. “But in the long run, it ended up costing me more.”

Sandefur said he has spoken with owner of Victory, who was apologetic but insisted he had to protect his investors and intellectual property rights. The owner even offered to work on a collaboration beer with Bearwaters brewers. But, at this point, Sandefur said he is still getting over his disappointment.

“Basically, this is a great lesson in intellectual property protection for do-it-yourself and small business guys,” Sandefur said.